Air Canada Opposes Proposed Ontario Budget Increases to Aviation Fuel Taxes

Air Canada has expressed its disappointment with the proposed Ontario budget to increase aviation excise fuel taxes, and has welcomed the decision by Ontario Opposition parties to defeat the government's proposed budget.

Canada already has some of the highest aviation taxes in the world, recently ranking an unenviable 136th position of 144 countries in a World Economic Forum survey.

A recent Conference Board of Canada study estimates that more than five million Canadians already drive to U.S. airports to avoid the high taxes on Canadian airline fares.

"As one of the largest private sector employers in the province of Ontario, I can say that the proposed increase to aviation fuel taxes is bad for our industry, bad for our employees, bad for our customers and ultimately bad for the economy of Ontario," said Calin Rovinescu, President and Chief Executive Officer. "Ontario will continue to lose business to U.S. border airports and other provinces with more progressive perspectives on economic development. The approach on aviation rates, charges and taxes must go in the other direction.

"Air Canada welcomes the decision of the opposition parties to defeat the Ontario budget and its punitive increases in aviation fuel excise taxes. The proposed budget would have increased costs to Canada's aviation industry by as much as $100 million a year. Even before the budget, Ontario had the highest excise tax on aviation fuel in North America. The proposed increases to almost triple the excise fuel tax would have been passed on to air travellers and shippers, resulting in higher fares for travellers to and from Ontario, and negative economic consequences in Ontario and Canada including direct and indirect job losses.

"Air Canada and its 12,000 Ontario-based employees will be looking for leadership from each of the parties on definitive measures to address the aviation cost structure in the upcoming Ontario election. We are calling on the parties to follow the lead of their provincial counterparts, such as B.C., and neighbouring competing U.S. states who recognize the value of the aviation industry as an economic engine and enabler of trade, not as a facile source of revenue to subsidize other government initiatives," concluded Mr. Rovinescu.

Air Canada directly employs nearly 12,000 people in the Greater Toronto Area alone - plus 2,200 more including its wholly-owned subsidiaries Air Canada Vacations and Air Canada Rouge as well as its Air Canada Express partners - Jazz and Sky Regional. Together with its Air Canada Express partners and Air Canada rouge, Air Canada operates more than 240,000 flights a year from Toronto Pearson Airport and carries about 18 million passengers.

See also: IATA: Soaring Ontario Fuel Tax Will Hurt Province’s Jobs, Economy